In Short

Background: During the Obama Administration, the Bureau of Land Management issued the Hydraulic Fracturing on Federal and Indian Lands Final Rule and the 2016 Methane and Waste Prevention Rule. Both rules prompted petitions for court review.

What's Happening: The recent change in administration has caused a flurry of questions regarding the government's position on these issues and provoked Congress to act.

Looking Ahead: The future of the Federal and Indian Lands Rule and the Methane Rule will be determined in the coming weeks based on the actions of the court, Senate, and President Trump.

The Trump Administration has signaled its intent to pull the plug on two rules issued by the U.S. Department of Interior's Bureau of Land Management ("BLM") in 2015 and 2016. Legal and legislative developments over the next weeks will likely determine whether and to what extent these Obama-era regulations remain in place.

The U.S. Court of Appeals for the Tenth Circuit is reviewing a lower court decision regarding BLM authority to regulate hydraulic fracturing, or fracking, on public and tribal lands. In March 2015, BLM issued the Hydraulic Fracturing on Federal and Indian Lands Final Rule ("Federal and Indian Lands Rule") implementing requirements relating to fracking well integrity, the disclosure of fracking chemicals, and the storage of fracking waste water. Wyoming, Utah, North Dakota, and Colorado, along with industry groups and several Native American tribes, challenged the rule in federal district court in Wyoming. In June 2016, Judge Scott Skavdahl struck down the Federal and Indian Lands Rule, finding that BLM lacked congressional authority to promulgate the regulations. BLM argued that Congress gave it authority to regulate fracking through several federal statutes, including the Federal Land Policy and Management Act of 1976 and the Mineral Leasing Act of 1920. The court rejected this argument, holding that the broad federal statutes cited by the government did not authorize BLM to regulate fracking on federal lands. Further, the court held that Congress expressed its view that the federal government did not have the authority to regulate fracking when it removed the EPA's authority to regulate nondiesel fracking with the 2005 Energy Policy Act. The government and environmental groups appealed the decision within days of its release, and oral arguments were scheduled for March 22, 2017.

Given the recent change in administration, the Tenth Circuit asked the government to confirm whether the government's positions on the issues presented remain the same, or have changed, suggesting that it would entertain additional briefing. On March 15, 2017, the government filed a motion to continue oral argument and to abate the case pending a new rulemaking by BLM. The government explained that BLM has begun the process to prepare a notice of proposed rulemaking to rescind the Federal and Indian Lands Rule. In response, environmental groups argue that the issue on appeal—whether BLM lacks legal authority to regulate hydraulic fracturing on public lands—will be just as central to BLM's rescission of the rule as the original rulemaking. The environmental groups further contend that an abeyance would shield the district court's ruling from review, effectively allow BLM to rescind the rule without meeting the requirements of the Administrative Procedure Act, and allow continued drilling under outdated standards. The circuit court cancelled the March 22, 2017, hearing and ordered supplemental briefing to address several issues including whether the appeals should be abated pending the newly planned rulemaking and the status of the current rule and the district court’s 2016 order striking down the current rule.

Meanwhile, Congress has moved to eliminate a second BLM rule—the Obama Administration's 2016 Methane and Waste Prevention Rule (the "Methane Rule") regulating methane emissions from oil and gas operations on federal and tribal lands. The Obama Administration issued the Methane Rule in support of its Climate Action Plan, arguing that the Methane Rule would lead to significant reductions in emissions of methane, a greenhouse gas said to be at least 25 times more potent than carbon dioxide. On November 18, 2016, the same day that BLM published the final regulations, Wyoming and Montana filed a petition for court review of BLM's regulations, followed shortly thereafter by a request for a preliminary injunction to prevent implementation of the final regulations on January 17, 2017. On January 16, 2017, the federal district court declined to prevent the rule's implementation.

Since President Trump assumed office on January 20, 2017, Republicans in Congress have moved to eliminate the Methane Rule under the Congressional Review Act ("CRA"), which allows Congress to overrule new federal regulations issued by government agencies. On February 3, 2017, the House of Representatives voted to approve a CRA resolution eliminating the rule. The Senate resolution remains pending as senators on both sides of the aisle remain undecided.

Key Takeaways

  1. The Trump Administration has signaled its intent to pull the plug on the Federal and Indian Lands Rule and the Methane Rule.
  2. The U.S. Court of Appeals for the Tenth Circuit is reviewing a lower court decision regarding BLM authority to regulate hydraulic fracturing, or fracking, on public and tribal lands as outlined in the Federal and Indian Lands Rule.
  3. House of Representatives voted to approve a CRA resolution eliminating the rule. The Senate resolution remains pending.